My iPod Touch Wont Let Me Press Free Button In App Store To Download Game

Looks like they rolled back to the old version of the store and it works fine now.

All working again.

We can't tell from here if they reverted to old version or fixed a bug, anyway it works now!

Yep, it looks like Apple has fixed the problem. I just sucessfully downloaded a free app on my original iPhone running iOS 3.1.3, without having to do any reset of my device. It just started working again -- finally.